Voluntary benefits offer a win-win for employers and employees.

December 14, 2011

Volunteers

Companies across the nation are looking for ways to cut costs. They also want to keep their best workers. So, to reach both goals, many employers are offering voluntary benefits. Voluntary benefits are optional programs that are made available by employers. Today, voluntary benefits can be an important source of personal insurance or savings products. Voluntary benefits are 100% paid for by workers.

What are voluntary benefits?

Voluntary benefits include life, accident, and other kinds of insurance. The costs are low, often as little as $3 to $4 per week.

People may be able to get these products away from the place where they work. But many workers may not have the time, understanding, or money for their option. Business owners can often get better prices and products. Most voluntary benefits policies are paid from a worker's paycheck. Also, the worker can take the benefits they buy to another job.

People fear the worst.

Rising healthcare costs are a problem for 85% of American adults. These results come from a poll by the American Society for Quality/Harris Interactive. Deductibles are getting higher. Co-pays are rising. The cost of medicine is getting higher. Because of high prices, some adults have not filled a needed prescription. Others have delayed a medical procedure due to the price.

No wonder many workers are worried. The cost of healthcare keeps rising.

Many workers fear they won't have enough money to cover bills during a sudden illness. In fact, this is the number one concern of 63% of full-time workers. It's also a concern for 75% of young families with children. These figures come from the Fifth Annual MetLife Study of Employee Benefit Trends.

There were other surprising facts in a study by the U.S. Department of Labor. Forty-eight percent of people who lost their home had foreclosure due to a disability. Most of these foreclosed homeowners had health insurance at the time of their disability.

A large number of Americans are also living paycheck to paycheck. So workers are asking their employers to give them more benefits. People looking for jobs are choosing the jobs that offer the most benefits.

The most popular voluntary benefits.

A recent study by a private insurer asked companies to give the top reason they provided voluntary benefits. Seventy-five percent said they offer voluntary benefits to give more benefits options. Forty-two percent said they offer voluntary benefits to fill a worker need. Thirty percent offered voluntary benefits because their workers asked for them.

What are the most popular voluntary benefits that business owners offer? Eighty-five percent of business owners say they offer one or more voluntary benefits including:

  • Life insurance (Offered by 63% of companies)
  • Disability insurance (Offered by 56% of companies)
  • Dental insurance (Offered by 52% of companies)
  • Critical illness insurance (Offered by 35% of companies)
  • Long-term care insurance (Offered by 33% of companies)

Today, workers view their jobs as a source for personal insurance and savings products. Most workers listed ease as the most common reason for buying voluntary benefits. Workers like the fact that they can pay for voluntary benefits through payroll deduction. Fifty-two percent feel that offering voluntary benefits increases the value of their company's offerings.

How voluntary benefits help businesses.

Voluntary benefits are popular because they work. People like them, too. Broad Reach Benefits is an employee benefits company in New Jersey. Here are some reasons they list for business owners to offer voluntary benefits:

  • No employer costs

    Voluntary benefits are a great way to offer people the benefits they want. Better yet, these products cost little or nothing to the company. In addition, business owners get payroll tax savings.

  • Benefits that workers want

    Voluntary benefits offer many coverage types people want most. The most popular include dental, disability, and additional life coverage.

  • Attracts and keeps workers

    Companies with stronger products to offer have lower worker turnover. They also find it easier to hire new people looking for jobs.

  • Save money with lower rates

    By using the bigger buying power of your group, your workers can get products at low group rates.

  • Makes workers happier

    People love the chance to choose from products that fit their healthcare needs.

How to talk about voluntary benefits

A recent MetLife survey shows the positives of offering voluntary benefits. First, people who feel good about their company's benefit package feel good about their jobs. People also feel more loyal to their employers. Voluntary benefits have wide appeal.

The most popular benefits are individual disability and life insurance plans. Both groups have one thing in common. Plans that protect workers' incomes are always the most popular voluntary benefits offering.

It's all about the message

Employers also have to take care of how they tell their workers about voluntary benefits. This can have a big affect on how your workers feel about their benefits package. When you have a clear and simple message your workers' satisfaction goes up. The opposite is true, too. You can offer the best benefits package in the world. But, if you don't have a clear message, your employees will not sign up for voluntary benefits.

Here's the good news. Telling workers about voluntary benefits is simple and easy. Explain that if workers have an accident or sickness, they'll get money to cover it. And that's it. People need to understand that voluntary benefits solve real-life problems. Tell them that voluntary benefits can help pay their bills. They can also put food on the table during a difficult time. When you tell workers about voluntary benefits in these terms, enrollment rates soar.

A win-win solution

The bottom line is that offering voluntary benefits makes good sense for everyone. They are low-cost. They have a big impact on the lives, money, and well-being of your workers. They make things easier on people when they get sick or hurt.

In this economy, voluntary benefits programs can be the most effective way to control costs. At the same time, they protect your employees. A good voluntary benefits program can be a win-win for everyone involved.